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Wenham speaks out on digital royalties

The World Independent Network has welcomed Sony and Universal’s recent statements on on breakage which have come out after the leak of the Sony-Spotify 2011 contract which added further evidence that the major labels were receiving large advances from digital services – promoting many to ask what the major labels actually did with this money. WIN says UMG and Sony’s statements simply echo commitments that the indie labels had previously all signed up to in their Fair Digital Deals Declaration – but added that “it is telling that there are no specifics in these recent statements from these corporations”.
In an open letter, Alison Wenham, boss of both WIN and the UK’s Association Of Independent Music, said: “We don’t know how long these policies have been in place, how much of the revenue they are actually sharing, whether this applies to all types of non-unit revenue, or how this money is distributed across their catalogues. We don’t know what analogue-era deductions are still getting made against digital income. As usual these facts are withheld”.
And Wenham celebrates the indie’s position which she says “makes it clear that signatory companies will share the benefits of dealing with digital services fairly and clearly with artists. This charter has been signed by over 1,000 indie labels who all promise to ‘account to artists a good-faith pro-rata share of any revenues and other compensation from digital services that stem from the monetisation of recordings but are not attributed to specific recordings or performances'”.
Interestingly Wenham raises the point that as the major labels have used indie label’s content as part of their ‘leverage’ with services such as Spotify – where indie labels are distributed, in part or in full, by a major label-owned distributor, whether that be a label services division of a major record company, or an independent distributor in which a major has a stake.

Asks Wenham: “Where is the independents share of this money? For all those labels distributed by majors – either directly or through a major owned or controlled distributor – where is their share of advances, guarantees and breakage? Majors have been leveraging the market share of their third party distributed content when negotiating with [digital service providers] simply to inflate their market share and therefore their cut of the digital pie. We do not believe that these distributed independent companies are always getting their share of this income, which is rightfully theirs”.